Considering buy vs rent - single, $100K savings but $44K salary, studio in Manhattan

Asked by Caterina, Upper West Side, New York, NY Tue Sep 29, 2009

just started thinking about this: rent for UWS studio is $1500 up anyway. Should I put my life savings in one property? 29 y/o single. Not sure if I'm going to stay in NY for how long, but if selling in the next few years will get better, I could use this as investment too. Any ballpark # for UWS studios? Any advice will be appreciated!

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Alen Moshkovich’s answer
Alen Moshkov…, Agent, Brooklyn, NY
Mon Oct 12, 2009

I was recently working with a first time home buyer, and we looked all over Manhattan. I took him to several UWS studios. We were looking for approx 400sf or larger, up to $300,000 price.
If you can live in 300sf apt, my colleague has a MINT, studio with a very large kitchen that has some of the best studio finishes I came across. Typical Maintenance will be between $600 and $750 on that size and prices will be in the area of $265,000 to $300,000. If you go lower on price you may need to do a large remodel job.
Your issue will be the following. Debt to income Ratio. What kind of debt do you currently have, maybe some school loans? Would your parents step in as guarantors or co-purchasers?
If a coop doesnt feel you are strong enough they may ask you to put more money into an escrow account in case you default on your payments. Debt to income shouldnt really exceed above 28%, but some buildings have other preferences, you will need to know that beforehand. If you will be looking at this as an investment, try to look for buildings with flexible sublet policies.

Good luck Caterina, and don't hesitate to ask more specific questions.
1 vote
Nancy Costa, , Waxhaw, NC
Sat Oct 3, 2009
That is a very valid question. You are not alone, many homebuyers are unsure whether to rent or to buy. It depends on your financial situation. It sounds like you have thought well into planning for home investment. No matter what part of the country you are from, I suggest talking to a real estate professional in that specific area and explain your situation. I see a lot of homebuyers coming forward now because of the lower interest rates and more properties at a realistic asking price. I am originally from NY myself, but I see clients like yourself all the time. The real estate professional who you work with can assist you in your search process and maybe suggest a mortgage professional to provide different payment scenarios. As a Realtor here in Charlotte, North Carolina, we all wish we had a crystal ball to see what the future holds in this most important investment decision anyone can make. I wish you the best of luck with your decision. Best regards, Nancy
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1 vote
Ralph Windsc…, Agent, Hauppauge, NY
Wed Sep 30, 2009
The Manhattan market, even though affected by the general downturn in real estate values, remains a fairly strong market compared to the rest of the country. If you plan of staying around for 5 years or more, then purchase something if you can. $1500 x 12 months = 18000 x 5 years is $90000 in rent thrown away plus whatever tax benefits you also lose - which could be approximately another $25K. Good luck.

Ralph Windschuh
Century 21 Princeton Properties
1 vote
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